Donald Trump¡¯s growing lead in the U.S. presidential race has sparked a rush to identify the key winning trades in global markets. History suggests that Japanese stocks are a good bet.

Japan¡¯s Topix index gained almost 30% in dollar terms in the one-year period after the 2016 U.S. presidential election that Trump won, beating the S&P 500 and the MSCI World index, which each rose roughly 20%.

Strategists say the boost from a weak yen will give Japanese shares a leg up, just as funds seek alternatives to Chinese equities in anticipation of a tougher Trump stance toward Beijing.

¡°The depreciation of the yen against the dollar as a result of higher U.S. bond yields should also support Japan equities,¡± said Tomo Kinoshita, global market strategist at Invesco Asset Management Japan. Given that manufacturing firms dominate Japan¡¯s stock market, ¡°although Trump¡¯s victory would benefit most of ex-China Asian equity markets, the Japanese equity market should benefit more.¡±

After years of being bypassed for faster-growing markets, Japan¡¯s stocks have sprung to life of late amid signs that the Asian economy has escaped deflation and is on a path to sustainable expansion. The Topix gauge vaulted past its bubble-era peak to touch an all-time high on Thursday, and another burst of buying is likely to galvanize it further.

A lot of the lift will come from a weaker yen, which benefits the exports of manufacturers such as Toyota and Nissan. Manufacturing companies account for over half of Japan¡¯s market capitalization, according to data compiled by Bloomberg and the Tokyo Stock Exchange.

The yen has lost almost 13% versus the dollar this year ¡ª the worst performance among major currencies ¡ª due to Japan¡¯s yawning yield gap with the United States.

Valuations are another factor.

The cheapest growth stocks among major non-Chinese markets are in Japan, with MSCI¡¯s growth index for Japan trading at 22 times on one-year forward blended earnings estimate.

To be clear, a win for Trump may not provide a blanket boost for Japan¡¯s shares. For one, stocks with a substantial exposure to China are likely to take a hit if tensions between Beijing and Washington intensify.

¡°We don¡¯t think Japan would be the safest market in Asia if Trump is reelected,¡± said Jasmine Duan, senior investment strategist at RBC Wealth Management Asia. ¡°If the yen continues to weaken, the Trump administration could take actions to force the yen to appreciate, which in return, could benefit Chinese equities.¡±

But some say Japanese stocks are likely to be a potential beneficiary as global funds reallocate money away from China in expectation of a tougher stance from Trump. The former president has said he might impose a tariff of...